How Costa Rica Can Maintain Its Momentum as an Emerging Leader in the Latin-American Luxury Tourism Space

Costa Rica is experiencing a great increase in luxury and ultra-luxury hotel offerings. As a destination of choice among high-end, high-ticket travellers, the country is at a juncture where idyllic tropical charm meets the social, economic and ecological needs of a booming luxury tourism industry.

Key trends

In recent years, Costa Rica’s hotel supply has increased to a historic level. Between 2023 and 2024 alone, the nation experienced a 6.5% boost in total room supply, up from 52,679 rooms to 56,106 rooms. That growth is spearheaded by Guanacaste, where 13.3% more rooms are available, largely driven by a surge in luxury and branded resort development.

The momentum has carried forward into 2025, where big openings include Nekajui, a Ritz-Carlton Reserve located in Peninsula Papagayo, and the Waldorf Astoria Punta Cacique, poised to further position the nation in the international hospitality arena. Marriott also greatly increased its own footprint in 2024, with ten deals being signed that will introduce 1,086 rooms and bring its Costa Rica pipeline to 15 projects. This kind of expansion has helped position Costa Rica as one of the most prominent high-end tourism destinations in Latin America; while countries such as Panama and the Dominican Republic also have developed tourism industries, Costa Rica stands out for how it has evolved into a luxury destination over the past decade. The country’s compact size, political stability and deep-rooted environmental identity have made it uniquely attractive to discerning travellers in ways that competing regional destinations are still working to achieve.

This boom experienced in Costa Rica follows global luxury hotel trends. Cross-border investment in the hotel sector increased 54% year-on-year according to CBRE, with EMEA, the Americas and Asia-Pacific all helping to drive the rebound in luxury hotel investment. Global luxury hotel investment, totalling around USD154 billion in 2024, is expected to move beyond USD166 billion in 2025, with over 5% yearly growth. Costa Rica – although a smaller market size-wise – continues to follow this path well, particularly considering North America’s strong 32% share in world luxury tourism and increasing demand among US tourists for experiential and environmentally conscious luxury tourism. Costa Rica’s own tourism performance supports the increasing demand for high-end experiences. In 2023, the nation recorded its all-time-high average expenditure at USD1,892.8 per visitor, up significantly from USD1,590.6 in 2022. Not only are tourists spending more money but they are also staying for more extended periods – approximately 12.9 nights each visit, and this figure has remained steady over the past three years.

This evolution has also accelerated the development of branded residences and second-home markets, which now play a major role in shaping Costa Rica’s luxury identity. Projects such as Reserva Conchal, Las Catalinas and Hacienda Pinilla offer not only high-end accommodation but also branded lifestyle products that blend private ownership with resort-level amenities. Discovery Costa Rica, one of the country’s most ambitious projects to date, has seen rapid pre-sales, showing strong appetite for residential-tourism hybrids. These developments are increasingly blurring the lines between hospitality and real estate and have positioned Costa Rica as a pioneer in the luxury second-home space in the region.

Occupancy rates have also remained steady at 65.3% in 2023 and 64.8% in 2024. Expanded international access has facilitated this growth, especially through Liberia Airport, where more than 20 international routes have increased access to the Guanacaste region for high-end travellers.

Early 2024 also brought improved hope, with international arrivals up 14.5% over the preceding year. By the end of the same year, Costa Rica was poised to welcome close to 2.6 million visitors and generate more than USD5 billion in tourism receipts, as per the Costa Rican Central Bank’s data.

Subsequently, a modest softness greeted early 2025 in the form of a 7% drop in the number of arrivals in February, partly the result of scarce airline capacity and a rise in the value of the Costa Rican colón. With a stronger currency, the destination becomes less affordable for many international visitors, especially those from the USA, its primary market. At the same time, limited flight availability, particularly in the high season, adds friction to what should otherwise be seamless luxury travel. Infrastructure also plays its part, road access to remote coastal areas remains uneven, and while Liberia and San José airports continue to expand, capacity constraints remain a challenge during peak travel periods.

Globally, however, the luxury sector remains robust. According to Barron’s, high net worth travel spending continues to perform well, with 5.2% growth projected in 2025 bookings. In that context, Costa Rica moves in parallel with broader consumer behaviour patterns. However, while the global luxury travel market shows steady demand, Costa Rica feels these shifts more directly. The country is particularly sensitive to changes in exchange rates, rising interest rates in key tourism markets such as the United States and Europe, and the logistical realities of airline connectivity and infrastructure on the ground. These variables shape not only how many people come but also how easy and appealing the journey feels.

This context helps explain why strong demand does not always translate into smooth or balanced growth – in fact, it often brings new kinds of pressure. While the country continues to attract high-end visitors and investment, many of the regions seeing the fastest development are also facing growing social tensions. In towns such as Nosara, Tamarindo and Santa Teresa, locals are dealing with rising costs of living, limited access to affordable housing, and, in some cases, displacement. As more foreign buyers invest in second homes or short-term rentals, property prices have soared to the point where long-time residents can no longer keep up. What began as economic opportunity is now sparking real fears about gentrification and the loss of community identity. Local NGOs and media outlets have become more vocal in questioning whether the benefits of the tourism boom are being shared fairly and whether the model is sustainable for those who actually live in these towns all-year-round.

Legal and policy frameworks

Legal frameworks add another layer of complexity. The Maritime Zone Law restricts construction within 50 metres of the high-tide line and imposes coastal development limitations designed to protect public access and natural landscapes. However, enforcement remains inconsistent, and several projects have faced delays or opposition due to non-compliance with environmental and zoning requirements. The challenge lies in aligning foreign investment interests with national land-use regulations and ensuring that community voices are integrated into development planning. This issue is far from unique to Costa Rica; international destinations from the Caribbean to Southern Europe are navigating similar challenges, where the benefits of high-end tourism must be weighed against social equity and environmental preservation.

The edgy factor here also complicates the growth outlook. Costa Rica has a long history of proud environmental conservation, with over 25% of the country’s land being protected. This green image is a big part of its tourism allure, but it also generates tension whenever construction advances into sensitive habitats. Projects that are close to national parks, marine reserves and wildlife corridors are subject to rigorous environmental impact assessments, which often slow timelines and escalate costs. While many investors view these safeguards as essential to preserving long-term value, others see them as bureaucratic obstacles.

Recent reports have flagged growing concerns about overdevelopment in key zones such as Papagayo and the Nicoya Peninsula. Environmental NGOs have called for stricter controls on resort construction, particularly in biodiversity hotspots. Simultaneously, developers argue that permitting delays and unclear regulatory processes hamper progress and deter investment. This disconnect highlights the need for a more co-ordinated, transparent and technology-enabled permitting system, something that countries such as Portugal and Greece have adopted with measurable success.

From a legal and policy perspective, several trends are worth noting. First, the Maritime Zone Law remains a cornerstone of coastal regulation, dictating land-use rights and public access. Compliance is essential, yet many projects overlook early-stage legal due diligence, leading to costly revisions later on. Second, any large-scale tourism project in Costa Rica must go through an Environmental Impact Assessment (EIA), a process overseen by SETENA, part of the Ministry of Environment and Energy (MINAE). While the goal is to ensure that developments respect the environment, the process is often slow and unpredictable, which can frustrate developers and sometimes lead to legal challenges.

Another obstacle in sustaining this luxury expansion is the persistent shortage of skilled labour. Premium accommodation requires a degree of service excellence that the local staff is still failing to achieve in areas including concierge services, spa programmes, culinary arts and multilingual guest relation services. Wage competitiveness and the high cost of living have rendered local professionals difficult to attract and retain, and have made it hard to bring in qualified workers, leading to numerous resorts making international hires. While this can address shortages in the immediate future, it does detract from the goal of sustainable economic development. The Costa Rican Institute of Tourism (ICT), business chambers and private organisations have recognised this vacuum and encouraged vocational training programmes. Though progress has occurred slowly, this is partly the result of a lack of co-ordination between educational programmes and the developing needs in the luxury business segment.

This human capital challenge is not unique to Costa Rica. Globally, luxury hotel operators are reporting similar issues. A McKinsey report notes that demand for personalised, high-touch services has outpaced the training infrastructure in many tourism-dependent economies. What distinguishes successful destinations is their ability to build public-private partnerships that support workforce development. Costa Rica’s 2022–2027 Tourism Development Plan includes measures to enhance training and employment, but implementation and funding remain critical hurdles.

Costa Rica’s position within the global luxury market is promising, but it requires legal and policy reforms that enhance investor confidence and community engagement as well as promote circularity. Internationally, destinations that have succeeded in attracting sustainable tourism investment, such as New Zealand and parts of South-East Asia, have done so by blending rigorous environmental protections with investor-friendly procedures. Costa Rica, with its established green brand and strategic geographic location, is well placed to follow this path.

The current landscape is, in many ways, the result of a deeper shift that took root after the COVID-19 pandemic. Travel preferences changed: experiences, privacy and nature became priorities, sometimes even above cost. Costa Rica, with its mix of tropical forests, active volcanoes, dual coastlines and urban touchpoints, is uniquely positioned to meet these new expectations in a single trip. Few other destinations in the hemisphere offer such compact diversity with direct airlift from major US hubs.

Yet, as the luxury and second-home markets grow, so do the related pressures. For this evolution to remain sustainable and socially inclusive, public policy must evolve too. A coherent national tourism strategy should focus on three key pillars: infrastructure, safety and incentives. The first is critical to enabling access and relieving logistical bottlenecks. The second addresses growing concerns around security in fast developing towns. The third, through fiscal or regulatory tools, can help mitigate external shocks such as currency fluctuations that make the country more expensive to foreign travellers.

Summary

In conclusion, Costa Rica has emerged as a leading player in the regional luxury tourism space, not only due to its natural offerings but also because of how well it has aligned with shifting global travel preferences. However, maintaining this position requires more than market momentum; it will demand careful legal frameworks, investment in local talent, and public policies that enable growth while protecting communities. With the right strategy, Costa Rica can turn this boom into a balanced and lasting model – one that respects both the visitor and the resident.